How Damaging Are US Tariffs on India?

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00:00The U.S. has slapped these punitive tariffs on India over its purchases of discounted Russian

00:06oil. But how damaging is this for the world's fastest growing large economy?

00:13In short, I don't think this is a dramatic piece of news. And it struck me when you were doing

00:19your introductory comments, you mentioned what a strong relationship Donald Trump

00:24and Narendra Modi had not that long ago, right? I mean, when Modi last went to the U.S.,

00:29or at least in the first term, the guys were playing stadiums across the U.S., you know,

00:34with thousands of people coming to see this double act. So what has gone wrong between these two

00:40leaders is incredibly confusing because we did think there was a strong partnership there.

00:47Now, Trump did warn that these 50 percent tariffs were on the cards. Still felt a little surprising

00:53when they came into effect a couple of hours ago. But I don't think that they will, as dramatic as

00:58it sounds, I don't think this will be incredibly damaging to India. India is a fairly closed

01:04economy. It does not send that much to the U.S. And that's, oh my gosh, I'm so sorry. What it does

01:11send to the U.S., pharmaceuticals and jewelry, that is being cut out. That's being carved out because

01:20the pharmaceutical situation in the U.S. is so very expensive. So about 45 percent of Indian exports

01:27will not be tariffed. Only about 2 percent of India's exports go to the U.S. So there will be

01:33some areas of the economy, apparel, footwear, that will hurt. But on terms of top-line growth,

01:40the economists seem to think that there'll be less than a 1 percent hit in GDP growth, which is growing

01:47at about 7 percent a year. So it will be painful in pockets, but not over the top line.